Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 section Schedule 4 paragraph 2

VAT as part of chargeable consideration

Schedule 4, paragraph 2 explains how value added tax (VAT) is treated as part of the chargeable consideration for a land transaction when calculating land transaction tax.

• VAT that is chargeable on a land transaction is included in the chargeable consideration for LTT purposes.
• This means LTT is effectively calculated on the VAT-inclusive price of the transaction.
• However, there is an exception where a landlord or seller exercises an option to tax the land after the effective date of the transaction.
• VAT arising from such a later option to tax is excluded from the chargeable consideration, so the buyer is not penalised by a decision they could not have anticipated.